FMCG and Consumer Durables Drive Market Surge Post-Budget 2025

The markets experienced a mixed reaction following the Union Budget for the fiscal year 2025-26, primarily due to varied performances across different sectors. Consumption-driven industries, notably the automotive, fast-moving consumer goods (FMCG), and consumer durables sectors, observed notable growth. This surge can be attributed to significant income tax relief for salaried individuals, which is anticipated to boost spending in these areas.

Market Overview

On February 1, 2025, the benchmark indices reflected some volatility during trading, with the BSE Sensex closing at 77,505.96 and the Nifty 50 settling at 23,482.15. While the overall market showcased mixed sentiment, it was evident that consumption sectors were thriving, in stark contrast to the selling pressure faced by infrastructure and energy stocks.

Top Movers in the Market

Maruti Suzuki emerged as a standout performer, gaining 6.05% in value. Other significant gainers included Trent (5.82%), ITC (3.75%), and Britannia (3.42%). In contrast, some stocks faced declines, with Larsen & Toubro and Bharat Electronics Limited both dropping by 3.59%. Additionally, Coal India and ONGC also saw losses of 2.65% and 2.34%, respectively.

Sector Performance

Examining the sector-wise performance, consumer-related segments showed robust growth. The Nifty Auto index rose by 1.91%, FMCG increased by 3.01%, and the consumer durables sector climbed by 2.96%. This increase is particularly noteworthy, especially as the budget aimed at enhancing domestic manufacturing through adjustments in import duties.

Market Sentiment and Expert Opinions

According to market analysts, the overall sentiment was propelled by the favorable tax measures, with Vinod Nair from Geojit Financial Services commenting on the modest increase in capital expenditure expectations. He remarked that while sectors such as railways and defense may feel the squeeze, consumption-based sectors seem to be capitalizing on the positive fiscal adjustments.

The broader market also reflected an optimistic trend, with the Nifty Next 50 index recording a gain of 0.60% and closing at 63,503.10. However, the Nifty Midcap Select index witnessed a slight decline of 0.56%.

Future Developments

Looking forward, investors are keenly observing the upcoming Reserve Bank of India (RBI) monetary policy meeting and the ongoing quarterly earnings season, which will likely provide additional direction to the market. Technical analysts foresee continued bullish sentiments, especially if the market can regain some resistance levels.

The India VIX, which gauges market volatility, also indicated a slight decrease of 13.24% to 14.10, suggesting a reduction in market anxiety. Market participants are expected to remain vigilant, particularly in consumption sectors, which may continue to reflect the positive outcomes of the budgetary measures.

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